A classic piece of financial advice states that you should not spend more than 25% of your monthly income (before tax) on rent.
So, for example, if you're bringing in $2,000 a month before tax, you should be spending about $500 of that on rent. Simple enough.
Well, it seems that this is no longer the norm. Many Canadians are spending upwards of 30% of their monthly pre-tax income on rent.
In a similar trend, people aren't really buying houses anymore. Statistics Canada showed that homeowners went from 69% in 2011 to 67.8% in 2016.
Now for the good stuff. On average Canadians are paying $1000 a month on rent. But the data varies quite a bit across provinces:
- Alberta: $1,279
- Northwest Territories: $1,191
- British Columbia: $1,148
- Ontario: $1,109
- Yukon: $1,040
- Saskatchewan: $1,021
- Nova Scotia: $909
- Manitoba: $891
- Newfoundland: $836
- Prince Edward Island: $817
- Quebec: $776
- New Brunswick: $741
- Nunavut: $737
As you can see, Montreal is on the bottom of the list, at only an average of $776. Compared to Albertans paying a whopping $1,279, we should consider ourselves quite lucky.
Zooming in we can see a more nuanced view of who actually spends the most on rent, not only the provinces where the rent is highest.
Here is a list of the urban centers with the highest share spending (more than 50% of income) on rent:
- Greater Toronto, Ont.
- Greater Vancouver, B.C.
- Ottawa, Ont.
- Montreal, Que.
- Edmonton, Alta.
In other words, although Montreal-living boasts cheap rent overall, it seems like Montrealers spend a large chunk of their budget on rent. It's a #lifestyle.
Also, It looks like high rents aren't just a problem for large urban centers, but also for municipalities located outside busy metro areas. It's a problem because for many Canadians rent increases, but wages are not increasing proportionally.